OFHEO Reports Dismal News for CA, FL, NV

The Office of Federal Housing Enterprise Oversight (OFHEO) reported that home prices declined 1.3% (5.2% annualized) in its seasonally adjusted purchase-only 4Q07 House Price Index compared with a 0.3% (1.4% annualized) decline in the third quarter.

Year over year, OFHEO said prices were down 0.3% with earlier gains more than offset by the fourth-quarter drop. In the OFHEO's broader index that includes all transactions, there was a 0.1% increase in the fourth quarter from the third and a 0.8% gain year over year.

"The year 2007 showed the first four-quarter decline in the purchase-only index since its earliest data in 1991," OFHEO Director James Lockhart said. He also said that both the purchase-only index and the all-transactions index showed more stability in home prices than other home price indexes and suggested that this could be partly because of "the greater stability in the prime, conforming mortgage market served by the enterprises than in other segments of the mortgage market."

The country's mountain areas continued to retain the best year-over-year performance. Utah was ranked No. 1 with home price appreciation of 9.3%, followed by Wyoming with 8.3% and North Dakota with 7.9%. In the previous report, Utah and Wyoming were ranked No. 1 and No. 2 year over year, while North Dakota improved from 9th.

Eleven states out of 51 (including D.C.) reported negative quarterly growth, with the largest declines recorded for Florida (-1.7% for the quarter), Nevada (-2.96%) and California

(-3.08%).

On a positive note, this is improved from the 22 states that reported negative quarterly growth in the third quarter. Year over year, Florida, Nevada and California also ranked in the bottom three at -4.7%, -5.9% and -6.7%, respectively.

In terms of metropolitan statistical area information, out of the bottom 20 with the worst deprecations, all but two were Florida or California communities. The worst three were Merced, CA (-19% year over year); Modesto, CA (-15.48%); and Stockton, CA (-15.27%).

In other home price news, the Standard & Poor's/Case-Shiller 20-city home price index fell by 2.15% between November and December, leaving the year-ago index lower by 9.08%.

The 10-city index fell by 2.28%, and the national index fell by 5.4%. From a year ago, the national index is down 8.9%, which was the largest drop in the 20-year history of the index.